News > Top Ag News > Midday Comments: 11/25/2020

Midday Comments: 11/25/2020

Nov 25, 2020

Tumbling wheat futures have led corn & soybean lower in thin, pre-holiday trading on Wednesday.  After challenging 4-week downtrending resistance with double-digit gains on Tuesday, wheat futures more than reversed yesterday’s rally with 15-17c losses after the Russian grin analyst SovEcon boosted its Russian wheat production estimate by 0.9 mmt to 85.3 mmt & increased its Russian wheat export forecast by 1 mmt to 40.8 mmt.  That’s just shy of the 40.9 mmt export record set in 2017/18.  By contrast, the firm lowered its Russian corn & barley exports forecasts by 0.3 mmt each to 3.9 mmt & 4.9 mmt, respectively.  SovEcon indicated it expected exporters to accelerate short-term wheat exports to avoid potential tax or shipping restrictions after Feb. 15.  The Russian news more than offset comments by a Ukraine official that warned total Ukraine crop production could fall 3 mmt below previous expectations & 10 mmt from last year’s 75 mmt record-high output.  Corn harvest is now seen at 30 mmt, wheat at 25 mmt & barley at 8 mmt, down from 35.9 mmt, 28.3 mmt & 8.9 mmt, respectively, for those crops in 2019.  Corn was pressured after Wednesday’s 9:30 am release of the EIA Weekly Petroleum Status report.  Although ethanol output jumped 8.232 mil.gal. (+2.91%) for the week to 291.060 mil.gal., ethanol stockpiles ballooned 27.846 mil.gal. (+3.28%) higher for the week to 876.372 mil.gal.  The fact that output was the highest since March 20 was more than offset by the highest stockpiles since Aug. 28.  Same-week ethanol production was the smallest since 2015,ethanol stocks are now 2.90% larger than last year.  Continuing unconfirmed rumors that some small Chinese processors had cancelled some US soybean purchases scheduled for Dec.-Jan. shipment due to poor processing margins again weighed on soybeans on Wednesday.  With markets closed on Wednesday night & Thursday & open only from 8:30 am to 12:05 pm on Friday, some liquidation of long December futures positions ahead of Monday’s first notice day on those contracts added pressure, too. After having been fractionally lower in corn, up 2-3c on beans, & about a penny higher in wheat overnight, Dec. corn futures were down 5.25c, March corn was 4.75c lower, Jan. beans was down 6.75c, March beans were 7.25c lower, Dec. soymeal was down $1.50/ton, Dec. soyoil was up 0.13c/lb., Dec. soft red winter wheat had crashed 22.75c lower & March SRW wheat had tumbled down 20.5c by 1:13 pm on Wednesday.
 
In export news, USDA did not report any daily export sales on either Tuesday or Wednesday. Traders are increasingly aware that no sales have been reported to China for any commodity since Nov. 9.  Taiwanese flour millers bought 3.021 mb of US milling wheat on Wednesday for Jan-Feb. shipment. 
 
Locally, corn & wheat basis levels were steady, & soybean basis was a penny higher on Tuesday. Top Ag elevators will be open on Friday, but most St. Louis river terminals will be closed for grain deliveries.
 
Would you like CBOT futures prices reported to your phone? Top Ag can send you nearby & harvest futures prices for corn, soybeans & wheat at 9:45 am, 11:15 am & 1:45 pm each day.  We provide the service for free, but you may have to pay for text messages--depending upon your phone plan. Call Scott or Jacob at Okawville at 243-5293 or Mike at Trenton at 224-7332 & we'll get you set up! 
 
"Closing Comments" are written by David Marshall, First Choice Commodities LLC, Nashville, IL.  To learn more about his farm marketing advisory or commodity brokerage services, contact him at dmarshall@firstchoicecommodities.com or call (618) 327-4370 (voice/fax) or (618) 314-0918 (cell). This commentary is not intended for specific trading strategies. We strive to insure this information is reliable, but we cannot guarantee its accuracy or completeness.  Commodity trading involves risks. You should fully understand those risks before trading.
 


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